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  • Writer's pictureChloe Chu

Prospects in the report on economic and social situation in Q3 and 9 months of 2023

Updated: Oct 20, 2023

According to the updated report from the General Statistics Office of Vietnam:

Source: Virtus Prosperity Research, GSO


1. GDP Growth Remains in Line with Expectations

GDP in Q3/2023 is estimated to increase by 5.33% compared to the same period last year, surpassing the growth rates of 2020 and 2021. This trend is positive. Specifically, the agriculture, forestry, and fisheries sector grew by 3.72%, the industry and construction sector by 5.19%, and the service sector by 6.24%.


GDP for the first 9 months of 2023 increased by 4.24% compared to the same period last year, with contributions from agriculture, forestry, and fisheries at 9.16%; industry and construction at 22.27%; and services at 68.57%.

The GDP growth rate for the first 9 months compared to the same period in the years 2011-2023 (%)


Despite experiencing growth, the GDP growth rate increase after 9 months remains lower than the target of 6.5% set by the National Assembly at the beginning of 2023. Therefore, the Ministry of Planning and Investment has revised the growth scenarios for the fourth quarter and the entire year of 2023:


"Scenario 1: The annual economic growth is projected to be around 5.0%, with the fourth quarter needing to achieve 7.0% growth (in the fourth quarter of 2022, the growth was 5.92%).


Scenario 2: The annual economic growth is projected to be around 5.5%, with the fourth quarter needing to achieve 8.8% growth.


Scenario 3: The annual economic growth is projected to be around 6%, with the fourth quarter needing to achieve 10.6% growth.


Regarding this matter, the Prime Minister has requested the selection of the scenario with an annual GDP growth of approximately 6% to continue striving for the highest achievable results in 2023."


2. Challenges Persist in Banking and Insurance, Stock Market Shows Signs of Recovery


The insurance market faces certain difficulties due to stringent regulations on insurance contracts through banking channels. The total insurance fee revenue for the entire market in the first 9 months of 2023 decreased by 6.9% compared to the same period last year.


The Vietnamese stock market has recorded positive signs of recovery in the past month, driven by international and domestic factors. Market liquidity has notably improved. Year-to-date, the average trading value in the stock market reached VND16,940 billion/session, a 16% decrease from the 2022 average; the trading value in the bond market reached VND5,770 billion/session, a 24.9% decrease; and the average trading volume in the derivative market reached 225,613 contracts/session, a 17% decrease.


The banking sector is still facing challenges, with credit growth in the economy at 5.73% (compared to 10.54% in the same period last year). Low demand, both domestically and internationally, poses difficulties for production and business operations, reducing the capacity to absorb capital by enterprises, resulting in low credit growth.


3. Foreign Direct Investment (FDI) Sees Growth


Foreign direct investment implemented in Vietnam for the first 9 months of 2023 is estimated at USD15.91 billion, an increase of 2.2% compared to the same period last year. This is the highest FDI implemented in the first 9 months over the past 5 years. The processing and manufacturing industry accounted for the highest proportion at over 82%, followed by the production and distribution of electricity, gas, etc. at 6.3%, and real estate business activities at 4.8%.


4. Slight Increase in Import and Export Compared to the Previous Quarter, Though Accumulated Figures for 9 Months Still Decrease Compared to the Same Period Last Year


Overall, for the first 9 months of 2023, the total value of import and export of goods reached USD497.66 billion, an 11% decrease compared to the same period last year. Specifically, exports decreased by 8.2%, and imports decreased by 13.8%. The trade balance for goods for the first 9 months of 2023 is estimated to have a surplus of USD21.68 billion.


Summary: We saw that the report illustrates the recovery of the Vietnamese economy in Q3/2023 compared to Q1 and Q2 of the year. However, there are still many challenges, particularly in insurance, banking, real estate, and manufacturing sectors. The growth in FDI is a positive signal, indicating Vietnam's attractiveness to foreign investors. The stock market shows signs of recovery. While there are signs of growth in exports and imports, monitoring the fluctuations in the international market remains crucial.

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